Key Takeaways Applied Digital Corporation's (APLD) shares have surged 52% so far in June, significantly outperforming the Financial - Miscellaneous Services industry's increase of 9.3%. The upside can be attributed to the rising demand for AI services as well as the company's progress with its infrastructure. APLD recently entered into two approximately 15-year lease agreements with the AI hyperscaler, CoreWeave. Moreover, calendar-year first-quarter earnings commentary by industry leaders, including Micros ...

Applied Digital Corporation’s (APLD) shares have surged 69.4% over the past month after declining till mid-April. The decline in its share price was not due to micro-factors but industry-specific headwinds, as certain hyperscalers were cancelling their leases during the first quarter of 2025. However, calendar-year first-quarter earnings commentary by industry leaders, including Microsoft (MSFT) and Meta Platforms (META) , signaled accelerating demand across hyperscale, colocation and AI workloads despite m ...

NEW YORK, May 20, 2025 (GLOBE NEWSWIRE) -- Cipher Mining Inc. (NASDAQ: CIFR) (“Cipher” or the “Company”) today announced its intention to offer, subject to market and other conditions, $150,000,000 aggregate principal amount of convertible senior notes due 2030 (the “notes”) in a public offering registered under the Securities Act of 1933, as amended. Cipher also expects to grant the underwriters of the notes offering an option to purchase up to an additional $22,500,000 aggregate principal amount of notes ...

Core Viewpoint - Applied Digital Corporation (APLD) has experienced a significant decline in its stock price following disappointing third-quarter fiscal 2025 results, raising concerns about its near-term performance while maintaining a long-term growth potential in high-performance computing [1][2][17]. Financial Performance - APLD reported a loss of 16 cents per share, which was worse than the Zacks Consensus Estimate of a loss of 11 cents, and a revenue of $52.9 million, missing the estimate by 16.75% [1][2]. - The company had earnings of 52 cents per share in the same quarter last year, indicating a substantial year-over-year decline [2]. Revenue and Business Segments - The revenue miss was primarily due to a 35.7% sequential decline in the Cloud Services business, attributed to technical challenges in transitioning to a multi-tenant on-demand model [6]. - APLD has invested nearly $1 billion in assets over the past year, focusing on building infrastructure for its High-Performance Computing (HPC) Data Center Hosting business [7]. Future Growth Potential - APLD is constructing three new buildings expected to increase its data center hosting capacity by 700 megawatts by 2027, with the first building, a 400 megawatt campus, anticipated to be operational by 2025 [8]. - The global high-performance computing market is projected to grow from $48.51 billion in 2022 to $87.31 billion by 2030, with a CAGR of 7.5%, indicating a favorable environment for APLD's growth [13]. Strategic Moves - The company is planning to sell its Cloud Service business to focus on its HPC segment, which is expected to generate significant funds for further investment in data centers [14]. - APLD's partnerships with major companies like NVIDIA, which holds a significant stake in APLD, could provide additional support for its growth strategy [16]. Investment Outlook - Despite the current stock price decline, APLD is viewed as a speculative investment with potential for significant rewards in the HPC hosting sector, appealing to investors with a high risk tolerance [15]. - The recommendation is to hold APLD stock for now, as the company may recover from its current challenges, particularly in the Cloud Service business [17].

Core Insights - Applied Digital Inc. has shifted its focus from cryptocurrency mining hosting to artificial intelligence (AI) and high-performance computing (HPC) workloads, reflecting a strategic pivot in its business model [1][11] - The company is currently constructing its first AI data center in Ellendale, North Dakota, with plans for additional facilities, aiming to meet the growing demand for AI data center capacity [7][8] - Applied Digital's stock has experienced volatility, with a significant drop in value despite the hype surrounding AI data centers, raising questions about the company's execution and ability to secure major clients [2][11] Company Performance - For fiscal Q3 2025, Applied Digital reported an earnings per share (EPS) loss of $0.08, which was better than consensus estimates by $0.02, while revenues grew 22.1% year-over-year to $52.92 million, falling short of the expected $64.82 million [9][10] - The Data Center Hosting business generated $35.2 million, down 7% year-over-year, while the Cloud Services business saw a significant increase of 220% year-over-year to $17.8 million, although this segment is planned for sale [10] Industry Context - The demand for AI data centers is being driven by major hyperscalers like Meta, Microsoft, Amazon, Alphabet, and Oracle, all of which are investing heavily in expanding their AI data center capabilities [6][5] - AI data centers require specialized infrastructure to handle higher electrical capacities and advanced cooling solutions, differentiating them from traditional data centers [4][3] Future Outlook - Macquarie Asset Management plans to invest $5 billion to support Applied Digital's AI data center initiatives, which will help build up to 2 GW of capacity [4] - Analysts have set a 12-month stock price forecast for Applied Digital at $10.67, indicating a potential upside of 170.73% from the current price of $3.94 [9]

Financial Performance - Applied Digital (APLD) reported a third-quarter fiscal 2025 loss of 16 cents per share, which was wider than the Zacks Consensus Estimate of a loss of 11 cents, compared to earnings of 52 cents per share in the same quarter last year [1] - The company generated revenues of $52.9 million for the third quarter, reflecting a 22.1% year-over-year increase, although it missed the Zacks Consensus Estimate by 16.75% [2] - The Cloud Services business revenues increased by 220% year over year to $17.8 million, but saw a sequential decline of 35.7% due to a shift in contract models [3] Business Segments - The Data Center Hosting segment generated $35.2 million in revenues, representing a 7% year-over-year decline [3] - The High-Performance Computing (HPC) Data Center Hosting business is negotiating with multiple U.S.-based hyperscalers to lease up to 400 MW of capacity, including ongoing construction at the Ellendale HPC data center [4] Cost Management - Selling, general and administrative expenses decreased by 24.3% year over year to $22.7 million [6] - Adjusted EBITDA for the quarter was $10 million, a significant improvement from a loss of $1.3 million year over year [6] - Adjusted operating loss narrowed to $8.8 million from a loss of $23.4 million in the previous year [6] Strategic Initiatives - The board of directors approved a plan to divest the Cloud Services Business to focus on core data center operations [7] - APLD secured a $375 million financing arrangement with Sumitomo Mitsui Banking Corporation to repay outstanding debts and fund the development of new data center buildings [8] - The company maintains a strategic partnership with Macquarie Asset Management, which has the right to invest up to $5 billion for the expansion of next-generation data centers [9] Balance Sheet - As of February 28, 2025, APLD had cash, cash equivalents, and restricted cash totaling $261.2 million against a debt of $689.1 million [10]

Applied Digital Corporation (APLD) Q3 2025 Earnings Conference Call April 14, 2025 05:00 PM ET Company Participants Operator - Conference Call OperatorMatt Glover - Representative, Gateway GroupWes Cummings - Chairman and CEO, Applied DigitalSaidal Mohamed - CFO, Applied Digital Conference Call Participants Nick Giles - Analyst, B. Riley SecuritiesThomas Shunsky - Analyst (on behalf of Brett Knobloch, Cantor Fitzgerald)Rob Brown - Analyst, Lake Street Capital MarketsDarren Astahi - Analyst, Broad Capital Pa ...

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